The medical service provider was overpaid $330,409 because quarterly payment
adjustments were not made according to the terms of the contract.

The Center is responsible for reconciling the time reports submitted by the medical
service provider to the invoices to verify that the invoice amount is correct. The initial
quarter's payment is based on the contract and each subsequent quarter is to include an
adjustment for the prior quarters reconciliation difference. A reconciliation
difference occurs when a review of the records shows the medical service provider was paid
too much or not enough.

Although the Center had calculated adjustments, it did not deduct these quarterly
adjustments from medical service provider payments for the time period running from
January 1, 1999 to January 15, 2000.

Center officials stated the overpayment occurred because there was no internal control
in place to identify that the quarterly adjustments were not taken. Because of pending
litigation between the Department and the medical service provider, the General Office has
stated the overpayment will offset other amounts due to the vendor. The department's
internal audit of the medical contract for the period October 1, 1998 through January 15,
2000 identified the overpayment. (Finding 1, pages 9-10)

Center officials stated they have implemented our recommendation to perform
reconciliations in the timeframe specified under the contract and adjust subsequent
payments as necessary.

OTHER FINDINGS

The remaining findings are less significant and are being given attention by the
Center. We will review progress toward implementing our recommendations in our next audit.

We conducted a compliance audit of the Center as required by the
Illinois State Auditing Act. We also performed certain agreed upon procedures with respect
to the accounting records of the Center to assist our audit of the entire Department.
Financial statements for the Department will be presented in that report.